2024 Legal Private Practice market outlook
We spoke to Emma Delli-Boviabout the state of the Legal Private Practice market and what firms and professionals need to be aware of, and plan for throughout 2024. Emma also shares advice on how firms can attract and retain top talent and the importance of business development as a key skill for legal professionals. Looking for support with your legal hiring strategy, or for a new opportunity, contact Emma. What specific trends have you seen in your market?At the start of 2024, we’ve seen some strong regional growth as law firms and specific teams at firms have become more location agnostic. This has opened up opportunities for top talent in the regional markets to have the opportunity to either work closer with their London counter-parts / partners on exciting deals, or actually work remotely for London firms and US / Magic Circle practices. Obviously, this opens up a discussion about London vs regional salaries, and with this set up happening more often, how much is really fair…but that’s a conversation for a different day!We’ve seen salaries start to stabilise following an increase in NQ rates. This has subsequently led to a change in candidate behaviour. Previously being motivated predominately by money, candidates are now considering a more holistic approach to their job search, prioritising also flexible / hybrid working, a supportive culture and a less stressful environment. Throughout 2023, there was a tightening of belts across the sector with lawyers over-worked and little prospect of budget for new hires to ease that. This led to increased disengagement and dissatisfaction amongst professionals, with stress cited as one of the main motivators for moving roles. It’ll be interesting to see if there is any slight change to this in 2024.There’s been a slight shift when it comes to client delivery. Clients want the best possible service for money and are therefore scrutinising every billable hour. Some of the practices we adopted during the pandemic such as, video conferencing and meetings, have all led to some savings when it comes to time and travel, but will this be enough? Continued use of virtual working and a focus on business efficiencies will also be impacted by the use of legal technology, which is definitely an ongoing trend. Thankfully, the adoption of a lot of these processes has helped when it comes to ESG strategies and commitments, which is good news all round!What factors have affected talent attraction and retention in the past 12 months?Talent attraction has been really interesting over the past 12 months, in a market where your salary is not going to help you stand out from the crowd, what do you do? We’ve seen firms use various tactics to try and attract talent, such as a focus on promoting 'most published deals', their ESG strategies and flexible working policies. We’ve also seen firms invest more in support function roles, such as marketing and business development (BD), to elevate their brand in a highly saturated market.In addition, there has been a massive M&A slump and so corporate and transactional disciplines, and their focus on recruitment, have been hit hard. Accordingly to Vacancysoft there has been a 58.2% decline in these vacancies. The economic climate hasn’t helped, especially with the rise of inflation, increased cost of borrowing and the war in Ukraine, leading to businesses either deciding to sit tight thereby causing stagnation in the market, or pull out of investments completely. With a drop in M&A deals, there is a knock-on effect for real estate, employment and commercial law headcount.With salaries stabilising, professionals are now considering more than just money when it comes to a move. Factors such as mental health and wellbeing are being cited as a key driver for those considering a move. Workloads remain very high despite there being fewer jobs and with the use of a 'one team' mentality, firms are looking to associate pools in different locations to share the load, instead of hiring additional people. Counter-offers are still rife, as businesses recognise that it's more cost effective to retain their workforce as opposed to hiring new talent. However, these are less likely to be accepted, as role changes are often motivated by more than renumeration.Flexible working policies being set in stone has also caused some market movement, with policies not always aligning with what people need. Which roles are most likely to be in demand in 2024 and why?Looking ahead to the new financial year, we anticipate the M&A market to return as deal levels increase, which means a slow and steady return of corporate and transactional roles. From a strategic point of view, once those deals start rolling in, firms are likely to want and need a pool of strong associates to support the team with that increased workload. It’s not a case of “if” it’s a case of “when” and so firms who are planning ahead, will be in the best position.There is also a high chance we’ll see an upturn in the need for insolvency and restructuring lawyers as the markets start moving. We might see businesses need to dissolve or restructure depending on their financial situation, especially with regards to interest rates and inflation.With the increased use of Artificial Intelligence (AI) there is likely to be an increase in the need for technology savvy experts and IT lawyers. Cost savings and excellent client delivery will remain a priority, so lawyers with knowledge of cybersecurity and data protection will be in-demand.Lateral partner hiring is also likely to increase, there has definitely been a good level of movement during 2023, but after a slow year for most firms, aggressive growth will likely be a focal point. Senior hires with portable practices will be in demand, as a great way to increase revenue for firms. What skills are in-demand for professionals wanting to work in this market?Experience of using AI in order to increase efficiencies will remain important. Strong communication skills will also be essential, especially for firms which operate in a location agnostic fashion, thus being able to communicate effectively with colleagues and clients in different offices and across different mediums, will be key.If you are a lawyer with strong business development (BD) and/or sales expertise, you will be in demand! Based on the current market, there is likely to be a continued upturn when it comes to firms expanding their sales and BD functions, meaning that lawyers who are hot on BD are going to be worth investing in! If you are someone with this skill set, I’d urge you to make it clear either on your LinkedIn profile, or your CV.What do clients and professionals need to be aware of?I think we have all been surprised at the adaptability and resilience shown by the legal sector in the past three years, and despite the numerous challenges faced by the market, the sector has met the challenges head on! With that being said, I don’t think we’ll see a slowdown of changes this year – just to keep everyone on their toes.The rise of AI will be prevalent across all sectors. Lawyers and firms are already using AI to a certain extent, such as using automation to produce briefs, but we anticipate things will go a step where firms will increasingly use legal tech to analyse contracts. With the continuous need to provide clients with a better value service, using legal tech to improve communications and reduce travel, will be a must.I also think there will be a shift in billable hours. For many years, the billable hour has been how firms charge their clients, and I don’t think this will be completely phased out. However, I do think there will be a shift when using this model for default payments. There’s a suggestion that this approach puts too much focus on the way firms are charging clients, rather than the service people are receiving. As we see more clients demand an improved service and more value for money, rather than the relationships they have, something has got to give! What therefore might come is more of an acceptance of using fixed fees or alternative charging models. These new ways of “packaging” legal services, will become more of a focus for our clients over the coming years. There is also likely to be a focus on BD / marketing functions. Every client we speak to still has transformational growth at the top of their agenda, and so achieving this will become really important. During a turbulent past 12 months it’s been difficult for firms to know where and how to spend their money, with some thinking it’s better to sit tight and ride out the storm, rather than risk making a bad investment. However, those who have bold ambitions to grow will likely focus on building out sales and marketing functions who can help capitalise client relations and strengthen brand awareness.In addition to the above, organic growth will be heavily influenced by retaining top talent, heavily influenced by supporting career development and investing in people – this will undoubtedly help firms hit those punchy growth targets.About EmmaEmma is a Senior Legal Recruitment Consultant with over 15 years’ experience in the legal sector, appointing top quality legal talent into law firms nationally – ranging from Magic Circle, to international, national and boutique. Emma has spent the last decade cultivating and developing strong relationships with firms and professionals, and therefore has an excellent understanding of the sector specialisms.Emma has successfully made senior and challenging hires through the use of Executive Search and Selection, as well as contingency recruitment; therefore being able to offer each client a bespoke service.For advice on the Legal Private Practice market, support with your hiring strategy or guidance on finding a new role, contact Emma.
